Egypt is drawing in capital from the Arabian Gulf as investors liquidate positions in the region to tap into expected growth from the Arab world’s most populous nation.
Analysts say funds are moving into both private investments and publicly traded securities.
The trend follows a major investment conference in the Red Sea resort of Sharm El Sheikh attended by global business and political leaders, where more than US$12 billion in funds was pledged by the UAE, Saudi Arabia and Kuwait alone.
“Money has been going into Egypt, following all the pledges of money to help it rebuild,” said Sanyalaksna Manibhandu, senior equities analyst at the National Bank of Abu Dhabi.
“If Dubai isn’t dominant, you tend to see Egypt do well,” he said.
Aly Abou-Sabaa, the vice president of the African Development Bank, said: “We have seen overwhelming support over the past two days, funds coming through foreign direct investment but also through the private sector.”
The low oil price has dented the appeal of UAE equities, with investors looking elsewhere for returns, while the positive effect of the country's inclusion in the MSCI Emerging Markets Index has largely worn off.
"Since June 2013 Dubai and Qatar have benefited from investors pricing in the benefits of an MSCI; now they've both lost some of that support," Mr Manibhandu said.
The Abu Dhabi Securities Exchange has lost 10.2 per cent over the past 12 months, while the Dubai Financial Market has fallen by 14.3 per cent over the same period.
By contrast, Egypt’s EGX is up 17.2 per cent during the same period. For Qais Al Maskati, the managing director of First Equity Partners, a Bahraini private equity firm, now is the right time for the company to add to its $1bn of Egyptian assets. “We are going to gear up [our presence in Egypt], like many other investors in the world,” he said. “Egypt is a promising country – that’s the simplest way to put it.”
The bank plans to increase lending to Egypt this year by $500 million, he added.
First Equity Partners also yesterday finalised the purchase of a controlling stake in White House Securities, which helps small and medium enterprises to list on Egypt’s Nilex, the country’s second-largest stock exchange.
First Equity has made investments in steel manufacturing, food, and information technology, and it expects an influx of new foreign direct investment to create new opportunities in a range of sectors.
Foreign direct investment (FDI) fell off following the revolution of 2011 and then again in 2013. But Egypt’s central bank’s predictions indicate that FDI will be higher than at any time since before 2010.
“The billions pledged at the conference are a definite positive, particularly as they come not only from Gulf investors, but Europe as well,” said Maya Senussi, a senior economist at Roubini Global Economics.
One financial sector analyst said: “Our clients have a lot of interest in Egypt. Investors are looking away from the Gulf, and towards Egypt, which looks lucrative in terms of FDI, deficit reduction, and GDP acceleration.
“You want to be invested in an oil-importing country right now, not an oil-exporting nation.”
However, Mr Al Maskati warned that more needed to be done to attract investors to Egypt. “There will be a lot of flux in Egypt over the next year,” he said, because “the government is yet to put together a comprehensive legal framework to ease tensions with investors. Having said that, there are a lot of good opportunities on the ground.”
abouyamourn@thenational.ae
jeverington@thenational.ae
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RESULTS
West Asia Premiership
Thursday
Jebel Ali Dragons 13-34 Dubai Exiles
Friday
Dubai Knights Eagles 16-27 Dubai Tigers
Company%20Profile
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
COMPANY%20PROFILE
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TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
COMPANY%20PROFILE%20
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Confirmed%20bouts%20(more%20to%20be%20added)
%3Cp%3ECory%20Sandhagen%20v%20Umar%20Nurmagomedov%0D%3Cbr%3ENick%20Diaz%20v%20Vicente%20Luque%0D%3Cbr%3EMichael%20Chiesa%20v%20Tony%20Ferguson%0D%3Cbr%3EDeiveson%20Figueiredo%20v%20Marlon%20Vera%0D%3Cbr%3EMackenzie%20Dern%20v%20Loopy%20Godinez%0D%3Cbr%3E%3C%2Fp%3E%0A%3Cp%3ETickets%20for%20the%20August%203%20Fight%20Night%2C%20held%20in%20partnership%20with%20the%20Department%20of%20Culture%20and%20Tourism%20Abu%20Dhabi%2C%20went%20on%20sale%20earlier%20this%20month%2C%20through%20www.etihadarena.ae%20and%20www.ticketmaster.ae.%0D%3Cbr%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
THE SPECS
Range Rover Sport Autobiography Dynamic
Engine: 5.0-litre supercharged V8
Transmission: six-speed manual
Power: 518bhp
Torque: 625Nm
Speed: 0-100kmh 5.3 seconds
Price: Dh633,435
On sale: now
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
Company%20Profile
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COMPANY%20PROFILE
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Company%20Profile
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Alan%20Wake%20Remastered%20
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Race card
5pm: Handicap (PA) Dh80,000 (Turf) 1,600m; 5.30pm: Maiden (PA) Dh80,000 (T) 1,400m
6pm: Handicap (PA) Dh80,000 (T) 1,400m; 6.30pm: Handicap (PA) Dh80,000 (T) 1,200m
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m
7.30pm: Handicap (TB) Dh100,000 (PA) 1,400m
Company%20profile
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